Biden touts new budget with tax hikes, critics push back

By Casey Harper (The Center Square)

President Joe Biden released his 2024 budget on Thursday which includes a slew of tax hikes, prompting a swift pushback from critics.

The White House said the budget would reduce deficits by nearly $3 trillion over the next decade. Critics have argued that despite these cuts, the national debt continues to soar and is expected to exceed $50 trillion over the next decade.

The Committee for a Responsible Federal Budget said that despite Biden’s claims, US gross domestic product will grow from 98% at the end of this year to a record 110% by 2033.

“The president’s budget would borrow $19 trillion through 2033 and raise the debt-to-GDP ratio from 98% at the end of 2023 to 110% by 2033, surpassing the record set in this country just after World War II,” said Maya MacGuineas, President. of the Committee for a Responsible Federal Budget. “He would spend $10.2 trillion in interest payments on the national debt alone – more than he will spend on defense or Medicaid over the same period.”

MacGuineas said Biden deserved “genuine credit” for the cuts he made, but said more was needed.

“Most of this massive borrowing is the result of policies put in place years ago by Democratic and Republican administrations and congresses, but it will take presidential leadership to enact real change, and this budget does not go far enough. to curb our dangerous debt levels is a top national priority,” she said.

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Presidents release these budgets each year as benchmarks for setting priorities for their agenda, as there is little hope that the budget will be accepted in bulk.

“It’s built on four key values: lowering costs for families, protecting and strengthening Social Security and Medicare, investing in America, and reducing the deficit by ensuring that this country’s wealthiest and big business begin to pay their fair share, and cut wasteful spending for Big Pharma, Big Oil and other special interests,” Shalanda Young, director of the Office of Management and Budget, told reporters on a call to the press.

The budget includes several proposed tax increases, including a 25% minimum tax on anyone with more than $100 million, an increase in the top marginal tax rate to 39.6%, an increase in the corporate tax from 21% to 28%, a billionaires tax, and more.

Small businesses have sounded the alarm about higher tax rates.

“President Biden’s tax increases will hit small and medium-sized businesses,” said Karen Kerrigan, president and CEO of the SBE Council. “The significant increases target many struggling businesses as they struggle to recover, compete and operate during an unstable and inflationary time.”

The White House has emphasized since Biden took office that any tax increases would only hit the wealthiest Americans. Kerrigan also disputed this claim.

“According to reports,” she said. “President Biden’s budget would – among other harmful proposals aimed at businesses and investors – raise taxes on individuals earning $400,000 or more, the ‘wealthy,’ and corporations (again, many small businesses are part of the group of taxpayers targeted by the president) by increasing the top marginal tax rate from 37% to 39.6%; increase the corporate tax rate from 21% to 28%; doubling the capital gains tax rate from 20% to 39.6% and imposing a new wealth tax on unrealized capital gains; increase the Medicare tax rate on earned and unearned income over $400,000 from 3.8% to 5%; and expanding the Net Investment Income Tax (NIIT) to include the active income of intermediate business owners and increasing the rate from 3.8% to 5%.

The budget proposal comes as Congress faces a looming debt ceiling deadline. Lawmakers must raise the debt ceiling or default on US debt obligations, an unprecedented event that would send shockwaves through the global economy. Republicans want to use the upcoming cliff to negotiate, but Biden has said he won’t negotiate.

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Republicans have also criticized Biden’s budget, suggesting the debt ceiling battle won’t be easy.

“President Biden just presented his budget to Congress, and it’s absolutely not serious,” said House Speaker Kevin McCarthy, R-Calif. “It proposes trillions in new taxes that you and your family will pay directly or through higher costs. Mr. President: Washington has a spending problem, not a revenue problem. »

Democrats defended the budget, again emphasizing deficit reduction and a series of spending proposals to help Americans.

“The Biden budget plan protects Social Security, strengthens Medicare and invests in our children,” said House Minority Leader Rep. Hakeem Jeffries, DN.Y.

Syndicated with permission from The central square.